President Donald Trump’s assertion that U.S. growth can tame debt echoes what Ray Dalio has called the most dangerous phase of a debt cycle: when leaders mistake prosperity for immunity.
In an interview with One America News on Thursday, Trump pointed to his “Big, Beautiful Bill” that locks in and expands tax cuts from his first term while adding new deductions on tips, overtime pay, and Social Security income for seniors. Combined with his latest round of tariffs, Trump argued, the package will deliver both “record growth” and an unprecedented fiscal windfall.
“We are becoming a country that is so rich, so powerful,” he said. “With the kind of growth we have now, the debt is very low relatively speaking. You grow yourself out of that debt.”
Real GDP rose at a solid 3.8% annualized pace in Q2 2025, but the debt picture isn’t “very low.” Gross federal debt still sits around $37.4 trillion, and the…
